Hey brother won't lend me a dime

By DAVID ENRICH
Wall Street Journal
January 26, 2009

Lending at many of the nation's largest banks fell in recent months, even after they received $148 billion in taxpayer capital that was intended to help the economy by making loans more readily available.

The overall loan decline likely understates the magnitude of the industry's retrenchment.

In normal times, banks would make loans and then sell many off to investors or financial institutions. But that practice has ground to a halt, so more loans today are staying on banks' books. As a result, some banks' loan portfolios could appear larger than they would have in the past, even though they aren't actually making more loans.

Bank balance sheets also have been inflated as more companies draw on credit lines that banks committed to before the financial crisis erupted. Last fall, an increasing number of borrowers started tapping those lines, banks say, either because other types of credit were evaporating or out of an abundance of caution.